Putin ally quits Russian parliament in property scandal

MOSCOW (Reuters) - An ally of Vladimir Putin resigned from the Russian parliament on Wednesday to fight accusations that he failed to declare ownership of property in the United States and to protect the reputation of the president’s party.

Russian President Vladimir Putin delivers a speech during a meeting of the Federal Security Service board in Moscow, February 14, 2012. REUTERS/RIA Novosti/Michael Klimentyev/Pool

Vladimir Pekhtin, who had already stepped down as head of parliament’s ethics committee, denied owning real estate abroad despite documents posted by bloggers on the Internet showing his name on the deeds of property in Florida worth $2 million.

The allegations are an embarrassment for Putin and his United Russia party, which Pekhtin represented in the State Duma lower house, and a rare victory for protest leaders in an online campaign to publicize alleged cases of official corruption.

The resignation appears designed to deflect any criticism of Putin and the party.

“I will not dwell on my personal feelings but I want to say one thing: I am clean before the law, have never violated and never will violate either the spirit or the letter of the law,” Pekhtin, 52, said in a speech to the State Duma.

He said the apartments in Florida were owned by his 35-year-old son Alexey and that he needed time to defend himself against allegations which might be used against United Russia, the government, his family and parliament.

“If it was only about me, then rest assured that I know how to take a blow,” he said.

“During all this time, people will be trashing my name, people will be trashing the United Russia party, of which I was one of the founders, people will be trashing my family. I just don’t want that.”

Pekhtin stepped down as head of the State Duma’s ethics committee last week for the duration of an investigation. A day earlier, Putin had submitted a bill to parliament that is intended to prevent officials stashing illicit wealth abroad.

It was not clear whether Putin had played any role in Pekhtin’s resignation but the Kremlin quickly welcomed the decision.

“What Pekhtin has done is honest and honorable. It’s not a question of accusations, it’s not a question of breaking the law, it’s a question of an honorable deed,” said Putin’s spokesman Dmitry Peskov.

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The documents posted by anti-corruption bloggers online show Pekhtin’s name on the deeds of three properties in Florida, one of which was bought for about $1.3 million. Documents seen by Reuters also carry the name of his son Alexey.

The law does not prevent officials from owning property overseas, but Pekhtin’s critics say he neglected to include the real estate in declarations he made for the State Duma on his property and income.

The accusations against Pekhtin first came from Alexei Navalny, one of the leaders of the biggest protests since Putin first rose to power in 2000.

“That’s it. We’ll no longer be seeing this glorious representative of the Party of Swindlers and Thieves on the State Duma’s website,” Navalny wrote on his blog. “Now he can move for good to Miami and live there peacefully.”

Putin, who returned to the Kremlin last May after four years as premier, has said tackling corruption is a priority.

But opinion polls show Russians are skeptical he will succeed, and the scandal around Pekhtin could further undermine confidence in his ability or desire to crack down on corruption.

The head of Russia’s central bank said in an interview that nearly $50 billion was transferred out of Russia illegally in 2012, a sum equivalent to about 2.5 percent of gross domestic product.

Putin called in December for “a whole system of measures to ‘de-offshore’ our economy”, an initiative intended to take the wind out of the sails of protesters who regularly describe Russia’s ruling party as “swindlers and thieves”.

But the bill he submitted last week is weaker than one proposed by the State Duma which would not allow apparatchiks to own property abroad or to open foreign bank accounts.